Microsoft recently signed a deal with Indonesia’s state-run power company to increase the country’s renewable energy capacity (Yasuyoshi Chiba) ·Yasuyoshi Chiba/AFP/AFP
A windowless Microsoft data center near Jakarta is filled with constant noise. It’s part of a high-tech construction boom sweeping Southeast Asia, promising economic opportunity but also starving for resources.
As demand for artificial intelligence grows, technology giants are vying to invest billions of dollars in the region, attracted by a growing plug-in user base.
New data centers (warehouse-like facilities that store online files and power AI tools, from chatbots to image-generating tools) are proliferating around the world, and the sector is growing particularly rapidly in Asia.
AFP was recently granted rare access to Microsoft’s data center in Indonesia as part of a new boom.
No corporate logos were displayed on the center’s vast, boxy exterior, and visitors were admitted only after careful security checks.
Keeping the system up and running is an ongoing task with technicians on site, even during religious holidays.
Data center capacity in Southeast Asia is expected to triple from 2025 levels by 2030, driven by a 10x surge in AI usage, according to a KPMG report.
“In just a few years, every app, every workload, every user will be using AI as part of their workflow,” Alistair Spears, Microsoft’s infrastructure manager, told AFP.
But many of Asia’s data centers will add demand to power grids that still rely heavily on fossil fuels that cause global warming.
That would put new pressure on the region’s often strained water supplies to keep servers from overheating.
～AI plays an active role～
At a data center in Indonesia, racks of metal-encased servers housed in tall white cabinets were busy answering AI queries from local users. This is an intensive and heat-generating process.
A “closed-loop” water cooling system works similar to a car’s radiator, requiring no regular refilling and preventing breakdowns.
Noel Walsh, head of the company’s cloud business, told AFP that high-performance chips “will require more strength.”
“We had to adapt the data center design to accommodate different power structures and different cooling schemes.”
Superconnected Singapore has long been a data center hotspot in Southeast Asia, but the city-state halted development from 2019 to 2022 due to energy, water and land use concerns.
This led to a proliferation of data centers in neighboring Malaysia, as well as Thailand, Indonesia, the Philippines, and Vietnam, along with an explosion of interest in AI following the debut of ChatGPT.
Chun Ki, of consulting firm Arthur D. Little, said “the boom is here” as companies compete for a “first-player advantage.”
Hosting the data center is a “win-win situation” for the government, he said, noting faster online tools will improve business efficiency and the local economy will grow as people come to work in the new tech park.
– Hyperscale –
Data center expansion will increase demand on the electricity grid, which remains heavily reliant on coal.
Power consumption by data centers in Indonesia, which generates nearly 70% of its electricity from coal, is likely to quadruple by 2030, according to energy think tank Ember.
Microsoft’s Jakarta facility is part of a $1.7 billion investment with potential “hyperscale” capacity requiring hundreds of megawatts of power, distributed to reduce risks from earthquakes and flooding.
The company says it is committed to “greening” the region’s power grid by encouraging energy transition plans.
“We’re not building power plants, but we’re working with power companies,” Microsoft’s Walsh said.
“In some parts of the world we use wind power, in other parts we use solar power, we also use hydropower, and in some countries we also use nuclear power. So we support all of that.”
Microsoft recently signed a deal with Indonesia’s state-run power company to increase the country’s renewable energy capacity by about 200 megawatts over 10 years.
～Sinking city～
Microsoft’s rivals Amazon and Google, as well as Chinese tech giants Alibaba and Tencent, operate data centers in the Jakarta area.
The metropolitan area, with a population of 42 million people, is sinking due to groundwater extraction and other factors. Authorities plan to eventually move the capital.
Olivia Jensen, a scientist at the National University of Singapore, said the data center boom “will further strain the region’s water resources, which have historically been overexploited and poorly managed.”
Microsoft predicts that water consumption will increase through 2028 and stabilize at 660 million liters the following year with the addition of closed-loop systems.
“We are rapidly evolving and what we are building now will consume zero water every day,” Walsh said.
As AI technology develops rapidly, the company has set aside large tracts of land at its Jakarta site for future construction.
But next-generation systems will likely require more computing power, Gee cautioned.
“If these things are going to get bigger and bigger and thirstier, something has to give,” Gee said.
